James’ tax proposal comes under attack

Erin Neff

Monday, June 4, 2001 | 10:39 a.m.

CARSON CITY - Sen. Mark James angrily defended his tax proposal Sunday night after the Assembly approved an amended version stripping out some of the corporate liability provisions he included.

"What the Assembly has done is make a mockery of corporate law in Nevada," said James, R-Las Vegas. "They've made a mockery of the bill and have put in serious jeopardy the entire funding mechanism."

Senate Bill 577 is one of two measures that provide revenue to fund the state's Distributive School Account, and forms a cog in the entire budget wheel.

James' bill includes a variety of fee increases for business filings aimed at raising $30 million over the next two years as part of an overall program to fund teacher salaries and other education needs.

However James countered those fee increases with a business-friendly balance: liability immunity for corporate directors. His measure would have granted corporate directors protection for their personal assets in lawsuits against the company.

Cases of fraud would not be included in the protection.

Assembly Majority Leader Barbara Buckley, D-Las Vegas, urged her house to amend the bill to allow lawsuits if actions by corporate directors failed to meet the fraud threshold and simply "promoted injustice."

"The fee increases are relatively minor for a new corporation," Buckley said. "We are only codifying case law."

On Friday, when the Assembly Judiciary Committee agreed to the amendments, Buckley said they were necessary to prevent "corporate crooks" from running unchecked in exchange for an $80 increase in an initial filing fee.

Buckley and others on her committee sensed on Friday that the Assembly version would run into trouble in the Senate. The Senate unanimously voted Sunday night not to concur with the amendment.

Some Senate Democrats disagreed with James' liability provisions, but realizing that they did not have the votes to beat the Republicans, agreed to not concur in hopes that the issue will be resolved in conference committee, where the bill was today.

Assemblyman Greg Brower, R-Reno, expressed concerns about approving the amendment in his house earlier Sunday. Since the entire education funding deal reached last week hinges upon successful passage of both SB577 and Assembly Bill 460, James was incensed.

"That is taking Nevada a huge step backwards," he said.